Maryland currently allows corporations that make multi-billions of dollars in profits to not pay their fair share of taxes. Combined Reporting is needed to stop this inequity and is already the law in 28 states. Combined Reporting will help create a more level playing field for local businesses to compete by requiring corporations who claim their headquarters are located in other states - to file with the state that is listed on their federal returns.
Over the next four years, the State of Maryland will face deficits that will accumulate to over $1 billion by 2028, according to projections from the Department of Legislative Services (DLS). DLS projects the 2025 budget will have a $418 million deficit that will increase to $572 million in 2026. These deficits are expected despite projected revenue growth by more than 3%.
Legislation passed this year to help retirees and working families has had an impact on reducing revenues according to DLS, including tax credits for military retirees and expansion of the Earned Income Tax Credit.
In addition, Gov. Wes Moore is working to fill more than 10,000 state employee vacancies and has vowed to hire 5,000 in his first year in office. Moore also wants to resurrect the Red Line transportation project in Baltimore, and decouple the gas tax from an automatic inflationary increase.
All of this costs money – on top of the projected deficits. As Maryland faces challenges in the years ahead, we need to look at tax reform, closing corporate loopholes, and requiring the wealthy and profitable corporations to pay their fair share of state taxes.
It is time for more fair tax policies - it is time to pass Combined Reporting legislation.